Risk index up for second quarter in a row

Global supply chain risk is up for the second quarter in a row, standing at 79.3, almost twice the pre-financial crisis high of just 40.7 at the end of 2002, according to the Chartered Institute of Procurement & Supply (CIPS), Risk Index for the fourth quarter of 2015.

The index, which is produced by Dun & Bradstreet for CIPS, tracks the impact of economic and political developments on the stability of global supply chains.

The survey found that Asia Pacific was again driving up global supply chain risk in the fourth quarter of 2015, breaking the Index’s record for the third consecutive quarter, up to 26.68 in the fourth quarter from 25.73 in in the first quarter of 2015. This increased risk is driven by the slump in Chinese demand for industrial commodities.

The reintroduction of Iran into global supply chains will add both benefit and uncertainty to risk into the MENA region.

Sub-Saharan Africa saw a drop in its risk score from 5.54 in Q3 2015 to 5.53 in Q4, which can be explained by macroeconomic improvements in Cote d’Ivoire, Namibia and Senegal.

It also found that the El Niño weather system is threatening dairy output in New Zealand and agricultural production in Australia and driving up risk in the global supply chain.